Centuria pays $115m for LFR investment
HMC Capital has quietly sold a significant asset from its HomeCo Daily Needs REIT.
Logan SuperCentre, until recently known as HomeCo Logan, found favour with Centuria for $115 million, reflecting a c6.7 per cent yield.
The buyer will hold it in a single asset fund set to run five years, in which an extension may be undertaken.
The off-market deal comes four months since Centuria paid $34.85m for Manning Mall in Taree, NSW.
Last May meanwhile the group picked up Halls Head Central in Western Australia for $70m.
Both those assets were also purchased for single asset funds.
The group holds 31 large format retail investments across Australasia.
Logan SuperCentre is in Slacks Creek, about 30 kilometres south of Brisbane’s CBD.
Big land, short WALE
Opened in 2007, on 2.7 hectares at 3525-3537 Pacific Highway, the main thoroughfare connecting Brisbane to the Gold Coast, Logan SuperCentre contains 27,117 square metres over two floors; high profile national chain occupiers include Anaconda, Early Settler, Fantastic Furniture, Freedom, Snooze and Spotlight.
There are also two specialty stores, a kiosk, car wash pad and over 600 car parks.
Almost fully occupied (vacancy is 0.1pc), the weighted average lease expiry could be considered short- 3.4 years.
Centuria is expected to add about 3000 sqm of retail area to an upper floor (story continues below).
The price it added, is about 22pc lower than replacement cost.
It will call on investors to back the purchase to the tune of $71m from March.
Annual distribution, it forecasts, will circle 8pc.
Major deal: agent
Co-located with the country’s largest IKEA, one of two in Brisbane, the Logan SuperCentre is the area’s dominant homemaker centre.
The sale, according to CBRE’s Simon Rooney, is the country’s priciest for an LFR investment since 2022.
It is also one of six worth over $50m to trade since last year, he said.
“This transaction demonstrates the continued demand and ready liquidity for well-located LFR assets that provide inbuilt fixed annual rental income in addition to strategic landholdings,” he added.
“In the case of Logan SuperCentre, the asset’s exceptional fundamentals and strategic location fronting the Pacific Hwy coupled with supportive mixed-use zoning to facilitate value-add initiatives were key drawcards”.
According to Mr Rooney, the precinct’s trade area – presently 1.1 million people – is set to grow 1.6pc pa until 2041.
LFR spending, estimated at $549.1m for the year to December, 2022, is also expected to rise over that period, the executive said, by 5.9pc to reach $1.6 billion pa.
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